Canadian dollar steadies ahead of Biden stimulus proposal

TORONTO — The Canadian dollar was little changed against its broadly stronger U.S. counterpart on Thursday as oil prices fell and investors awaited details on U.S. President-elect Joe Biden’s economic stimulus plan.

Biden will unveil a stimulus package proposal designed to jump-start the economy during the coronavirus pandemic with an economic lifeline that could exceed US$1.5 trillion and help minority communities.

Canada sends about 75 per cent of its exports to the United States, including oil. U.S. crude futures were down 0.9 per cent at US$52.44 a barrel as bullish signals from Chinese import data and U.S. crude oil stocks draws were outweighed by surging coronavirus cases in Europe and new lockdowns in China.

The Canadian dollar was trading nearly unchanged at 1.2693 to the U.S. dollar, or 78.78 U.S. cents, despite gains for the greenback against a basket of major currencies.

The loonie traded in a range of 1.2666 to 1.2709. Last week, it touched its strongest in nearly three years at 1.2626.

Canadian home sales data for December is due today, while the Bank of Canada is due to make an interest rate decision next week.

Money markets see an increased chance of the central bank cutting interest rates closer to zero, as tightening economic restrictions to contain a second wave of COVID19 cases offset optimism that activity will rebound later this year.

Canadian government bond yields were mixed across the curve, with the 10-year little changed at 0.811 per cent. On Tuesday, it touched its highest in nearly 10 months at 0.887 per cent.